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Investors are still concerned about weak prospects for the Chinese economy and the possible fallout of this on the South African economy.
These concerns also affected the rand on Wednesday morning, which gave some of the big double-listed rand hedges a boost and explained the increase in the Industrial and Resources indices. By midday the rand was again close to R13.50 a dollar, after weak car sales in August reaffirmed the difficulty of the current economic environment.
READ: Rand recovers footing but weak economy a risk
Although the All-share index remained in the black on Wednesday morning, trade was fairly volatile with the index swinging as much as 0.8% during the course of the morning. By midday the All-share was again 1.26% stronger at 49 125 points, and the Top 40 index had improved by 1.38% to 43 571 points.
The Resources index was the strongest performer and gained 2.53%, while the Industrial index was 1.24% higher. The Financial index improved by 0.91%.
After Wall Street again dipped sharply on Tuesday after disappointing Chinese manufacturing data, world markets were more stable on Wednesday morning.
The Chinese markets were however more volatile and the Shanghai Composite Index saw swings of more than 5% as investors tried to gauge the level of state support for the market. The Hang Seng Index was more than 1% lower.
Chinese markets will however be closed for the rest of the week for a holiday commemorating the end of World War II, which means the market’s attention will be focused on Friday’s US jobs report for an indication of what will happen to US interest rates.
Among the big double-listed shares to strengthen on Wednesday morning, Richemont [JSE:CFR] gained 2.13% to R99.73 and SABMiller [JSE:SAB] was 21.15% stronger at R616.32. Naspers [JSE:NPN] traded 1.85% stronger at R1 660.00 and Bidvest [JSE:BVT] rose 2.15% to R317.69.
There was much activity in the retail sector and Mr Price [JSE:MPC] was one of the busiest shares, with the stock 1.47% higher at R210.06. Pick n Pay [JSE:PIK] was 0.37% stronger on a new 52-week high of R63.03.
Massmart [JSE:MSM], which announced a 26% drop in headline earnings last week, reached a new intraday 52-week low in morning trade before it recovered. By midday the share price was 0.85% higher at R113.25. The share price has lost 22.92% of its value over the past 30 days.
BHP Billiton [LSE:BIL] made a strong run in the resources sector and traded 3.75% higher at R222.48, but Glencore’s [JSE:GLN] woes continued. The share, which lost 40.69% over the past 30 days before Wednesday’s trade, was another 3.75% lower at R26.55.
Although the gold sector was 2.50% down by midday, DRDGold [JSE:DRD] improved by 9.31% on the back of strong results. The company posted a 13% increase in gold production to 150 145 ounces and a 48% rise in operating profit to R384.3m year-on-year.
The airline company Comair [JSE:COM] was one of the biggest losers as it warned that full-year earnings compared to the previous year could be down by at least 12%. By midday the share price had lost 5.44%; it is now on a new 52-week low of R3.30. The share is now 33.56% lower over the past 30 days.
Sun International [JSE:SUI] was 0.25% lower at a new 52-week low of R99.75. The group announced on Wednesday morning that it has finalised a merger of its Latin American business with Chile’s Dreams SA, to create a group valued at about $400m.
Sun International will own 55% of the merged entity, which will have more than 6 000 slot machines, 295 gaming tables and over 530 hotel rooms in Chile, Panama, Peru and Colombia.
